338 F.

3d 394

TEXAS A&M RESEARCH FOUNDATION, PlaintiffAppellant-Cross-Appellee,

v.
MAGNA TRANSPORTATION, INC., Defendant-Third Party
Plaintiff-Appellee-Cross-Appellant,
v.
Italia Line, Third Party Defendant-Appellee-Cross-Appellant,
Navaho Shipping Agency, Inc., Third Party DefendantAppellee.
No. 02-40264.

United States Court of Appeals, Fifth Circuit.

July 9, 2003.

COPYRIGHT MATERIAL OMITTED Thomas C. Fitzhugh, III (argued),

Fitzhugh & Elliott, James Corbin Van Arsdale, Houston, TX, for Texas
A&M Research Foundation.
Victor Raul Rodriguez (argued), Houston, TX, for Magna Transp., Inc.
William Andrew Durham (argued), Justin William Renshaw, Eastham,
Watson, Dale & Forney, Houston, TX, for Italia Line.
Frank E. Billings, Billings & Solomon, Houston, TX, for Navaho
Shipping Agency, Inc.
Appeals from the United States District Court for the Southern District of
Texas.
Before SMITH and BARKSDALE, Circuit Judges, and DUPLANTIER,*
District Judge.
JERRY E. SMITH, Circuit Judge:

Plaintiff Texas A&M Research Foundation ("TAMRF") sued defendant Magna

Transportation, Inc. ("Magna"), for damages suffered from the late delivery of
specialized ocean research equipment. Magna, in turn, sought indemnification
from third-party defendants Italia di Navigazione, S.p.A ("Italia"), and Navaho
Shipping Agency, Inc. ("Navaho"). The district court held Magna, Italia, and
Navaho jointly and severally liable to TAMRF but denied certain items of
damages as unreasonable and unforeseeable. All but Navaho appeal.
I.
2

TAMRF is a private, non-profit corporation that, under contract with the Joint
Oceanographic Institute, Inc., conducts a research program known as the Ocean
Drilling Program. TAMRF maintains a research vessel, the JOIDES
RESOLUTION, which conducts deep water drilling into the ocean floor in six
annual, two-month-long cruises, or legs, that are planned at least eighteen
months in advance by lengthy consultation and preparation. Once the research
projects for given leg are approved and the scientists selected to conduct the
experiments, special equipment must be assembled and shipped to a port where
it can be loaded on the JOIDES RESOLUTION. Each shipment is time
sensitive, because port time is expensive and steals time from research.

A new hammer device specifically designed to penetrate the earth's crust was to
be tested on Leg 179. The crew and equipment were to meet the vessel in
Capetown, South Africa, in early April 1998. TAMRF selected Magna to
arrange for the transport of the necessary equipment. Magna contacted Navajo,
which had a direct contract to arrange booking for Italia, and obtained a rate for
shipment on the M/V MORELOS, Voyage 17. On February 3, 1998, Magna
entered into a contract with TAMRF to arrange shipment of the cargo for
arrival in Capetown by March 23, 1998. Magna had worked with TAMRF and
was aware of the time-sensitive nature of the delivery.

Magna, in turn, contracted with Navaho for the carriage of TAMRF's cargo,
which consisted of a flatrack and two containers. Navaho engaged Italia to
carry TAMRF's cargo. The result of this string of contracts was an arrangement
for TAMRF's equipment to be shipped on the MORELOS, Voyage 17, which
was scheduled to sail from Houston in late February 1998, and was estimated to
arrive in Capetown on March 23.

On February 20, 1998, Navaho issued a bill of lading to Magna certifying that
TAMRF's cargo had been loaded on the MORELOS, Voyage 17; the
MORELOS, Voyage 17, departed Houston on the same day. On two separate
occasions, Navaho confirmed that the cargo had sailed on the MORELOS.
When TAMRF's personnel flew to meet their cargo in Capetown, however, they

were able to locate only the flatrack and not the two containers.
6

TAMRF's agent in Capetown informed Magna that the containers were

missing, and Magna eventually contacted Italia, which replied that the
containers were at sea aboard the MORELOS, Voyage 18. The containers had
not even been loaded until April 1998, after their scheduled arrival in
Capetown. Before TAMRF's discovery that its cargo was missing, Italia had
made no effort to inform any party that the cargo had not been shipped aboard
Voyage 17.

After learning its containers were aboard Voyage 18, TAMRF requested that
the containers be discharged in Miami, Florida, and then Valencia, Spain, but
Italia refused to offload the containers. The MORELOS continued on to La
Speiza, Italy, where TAMRF's personnel met the cargo and placed the most
essential equipment into a single container for air shipment to the island of
Reunion. From there, TAMRF's personnel chartered a small freighter to carry
the container and attempted a midsea rendezvous with the JOIDES
RESOLUTION. Because of rough seas, the attempt failed, and none of the
equipment was transferred to the research vessel.

II.
8

TAMRF sued Magna, alleging breach of contract and fraudulent

misrepresentation. Magna brought in Navaho and Italia as third-party
defendants pursuant to FED.R.Civ.P. 14(c). After a short bench trial,1 the
district court found the defendants jointly and severally liable, decided that
TAMRF had failed to offer any evidence of damages, and invited a motion to
reopen the record.

After TAMRF made, and the district court granted, the motion to reopen,
TAMRF submitted affidavit and documentary evidence of certain expenses it
had incurred, allegedly as a result of defendants' conduct. The court considered
the additional evidence and altered its judgment, awarding TAMRF damages of
$49,057.972 but disallowing various consequential damages because they were
unforeseeable and thus unrecoverable.

10

All parties except Navaho appeal. 3 TAMRF appeals the denial of its
consequential damages and the refusal to award attorneys' fees. Magna and
Italia appeal the calculation of damages. Italia challenges the assessment of
liability.

III.

11

Italia contends that it is immune from liability and, in the alternative, that the
district court erred as a matter of law in imposing joint and several liability. As
an initial matter, however, we conclude the court improperly applied rule 14(c)
in holding Italia and Navaho directly liable to TAMRF. Because the court
abused its discretion in imposing such liability, we need not address Italia's
other arguments with respect to this issue.

12

After being sued by TAMRF, Magna joined Italia and Navaho as third-party
defendants. TAMRF took no steps to assert claims against the third-party
defendants. Yet, in its final order, the district court purported to realign the
parties, allowing TAMRF to proceed directly against Navaho and Italia.

13

Rule 14(c) governs third-party practice in admiralty proceedings and, in some

circumstances, allows a plaintiff to proceed directly against third-party
defendants. The rule provides that "the defendant ... may bring in a third-party
defendant who may be wholly or partly liable, either to the plaintiff or to the
[defendant as third-party plaintiff]." Magna exercised that option, filing a thirdparty complaint seeking indemnification from Italia and Navaho.

14

The rule additionally states that "the third-party plaintiff may also demand
judgment against the third-party defendant in favor of the plaintiff, in which
event ... the action shall proceed as if the plaintiff had commenced it against the
third-party defendant as well as the third-party plaintiff." This clause is
inapplicable here, however, because Magna's third-party complaint did not
demand judgment against Navaho and Italia in favor of TAMRF. Instead,
Magna sought indemnification from Italia and Navaho for any sums it was
required to pay TAMRF.

15

Courts have taken a lenient approach in determining whether a third-party

plaintiff has "demanded judgment" in favor of the plaintiff such that the
plaintiff may then pursue its action directly against the third-party defendants.4
This case, however, does not involve inapt phrasing in a complaint that was
nonetheless intended to invoke the direct suit provision of rule 14(c).

16

To the contrary, Magna's third-party complaint entirely fails to meet the

substantive requirements of that provision. Nowhere does it request that Italia
and Navaho be held liable directly to TAMRF; in the absence of such a request,
there was no basis for TAMRF to recover directly from them under rule 14(c).
Consequently, the district court erred in finding Italia and Navaho directly
liable to TAMRF, although they are potentially liable to Magna for any
amounts expended in satisfaction of a judgment in favor of TAMRF.

IV.
17

In its initial findings of fact and conclusions of law, the district court concluded
that, although TAMRF had established defendants' liability, it "inexplicably
ha[d] provided no evidence to support a finding of damages...."5 Accordingly,
the court invited TAMRF to move to reopen the record for submission of
evidence on damages. TAMRF made, and the district court granted, such a
motion seven days later. All damages awarded were based on the additional
evidence submitted by TAMRF pursuant to that order.

18

We review for abuse of discretion the decision to reopen the record. 6 "[T]he
extent of the court's discretion to reopen the case and to consider [additional]
materials depends, in the first instance, on the particular Federal Rule of Civil
Procedure under which the motion arises." Lavespere, 910 F.2d at 173. A
motion filed after judgment requesting that the court reconsider its decision in
light of additional evidence constitutes either a motion to "alter or amend" under
FED.R.Civ.P. 59(e) or a motion for "relief from judgment" under FED.R.Civ.P.
60(b). See id.

19

"Under which Rule the motion falls turns on the time at which the motion is
[filed]. If the motion is [filed no later than] ten days of the rendition of
judgment, the motion falls under Rule 59(e); if it is [filed] after that time, it
falls under Rule 60(b)." Id. Here, the motion was filed seven days after the
entry of the initial order, so we we treat it as a motion to alter or amend under
rule 59(e).

20

"Because Rule 59(e) is not subject to the limitations of Rule 60(b), the district
court has considerable discretion in deciding whether to reopen a case in
response to a motion for reconsideration arising under the former rule." Id. at
174. In exercising this broad discretion, the court should consider four primary
factors: "(1) the reasons for the plaintiffs' default, (2) the importance of the
evidence to the plaintiffs' case, (3) whether the evidence was available to
plaintiffs [prior to the entry of judgment], and (4) the likelihood that the
defendants will suffer unfair prejudice if the case is reopened." Ford, 32 F.3d at
937-38 (citing Lavespere, 910 F.2d at 174).

21

The first and third factors cut against granting the motion to reopen. TAMRF
offers no substantial explanation for its failure to submit, before judgment, the
documentary and affidavit evidence proffered after the record was reopened.
Further, there is no allegation that this evidence was not freely available before
entry of the initial judgment. Unlike a rule 60(b) motion, however, a rule 59(e)

motion need not "make any particular showing of inadvertence or excusable

neglect."7 Therefore, even if these factors weigh against TAMRF's request to
reopen, they are not determinative. See Ford, 32 F.3d at 938.
22

The second and fourth factors, by contrast, weigh heavily in favor of TAMRF.
Although the district court already had established defendants' liability, its
judgment left TAMRF without any recovery. Evidence of damages was
obviously of critical importance. In addition, the defendants did not suffer any
unfair prejudice from the reopening. The affidavit and invoice testimony
overlapped substantially with McPherson's testimony, to which the defendants
did not object at trial; they were therefore already aware of most of the damages
claimed. Further, the additional damages identified in the supplemental filings
took the form of expenses actually incurred by TAMRF.

23

Defendants' position is that TAMRF's expenses are not recoverable as

damages, but defendants never have argued that these expenses were not
incurred. Essentially, defendants were not unfairly surprised by the evidence,
which did not directly relate to their principal arguments against recovery.
Consequently, defendants were not unfairly prejudiced by evidence of the
expenses. Taken together, these factors establish that the district court did not
abuse its discretion in inviting and granting the motion to reopen.

V.
24

As part of its submission on damages for the reopened trial record, TAMRF
introduced McPherson's affidavit, which described in detail various expenses
TAMRF had incurred purportedly in connection with the defendants' failure
timely to deliver the cargo to Capetown. The six-page affidavit was
accompanied by 329 pages of documents detailing TAMRF's expenses. The
district court admitted it as a business record affidavit with respect to most of
the documented charges; the court excluded, as speculative, that portion of the
affidavit discussing damages for "lost ship time." Both parties challenge the
treatment of the affidavit. We review evidentiary rulings for abuse of discretion.
Green v. Adm'rs of Tulane Educ. Fund, 284 F.3d 642, 660 (5th Cir.2002).

A.
25

Italia and Magna contend that the invoices submitted with McPherson's
affidavit are inadmissible under FED.R.CIV.P. 37(c)(1), which provides that a
party cannot offer, at trial, documents that have not been disclosed in
accordance with FED R. CIV. P. 26.8 Rule 37(c)(1) provides that a party who
fails to disclose such information "shall not, unless such failure is harmless, be

permitted to use as evidence at a trial, at a hearing, or on a motion any witness

or information not so disclosed." FED.R.CIV.P. 37(c)(1). We review for abuse
of discretion a decision not to exclude documents under rule 37. United States
v. $9,041,598.68, 163 F.3d 238, 252 (5th Cir.1998).
26

In evaluating whether a violation of rule 26 is harmless, and thus whether the

district court was within its discretion in allowing the evidence to be used at
trial, we look to four factors: (1) the importance of the evidence; (2) the
prejudice to the opposing party of including the evidence; (3) the possibility of
curing such prejudice by granting a continuance; and (4) the explanation for the
party's failure to disclose. See id.

27

Although TAMRF failed to explain its failure to disclose, the prejudice to the
adverse parties was negligible, because the witness in support of whose
testimony the invoices were offered had been designated properly as a witness
before trial. Further, any prejudice was cured by the approximately one month
during which Italia was allowed to examine and respond to the contested
evidence. The district court did not abuse its discretion in admitting the
documentary evidence supporting the affidavit.

B.
28

Magna contends the McPherson affidavit is hearsay not admissible under any
exception. The district court, however, concluded that the affidavit was
admissible as a business record affidavit, which requires only that the affiant
have "personal knowledge to testify as custodian of documents" and "personal
knowledge as to some of the statements in the affidavit." FSLIC v. Griffin, 935
F.2d 691, 702 (5th Cir.1991).

29

The affidavit states that part of McPherson's duties as vice-president of

TAMRF included the management of all records and documents pertaining to
the Ocean Drilling Program and that such records are kept under his custody
and control. The district court also reasonably concluded that, as vice-president
of the foundation, McPherson had personal knowledge as to some of the
statements in the affidavit.9 Italia's principal argument is that McPherson lacked
personal knowledge of certain of the facts in the affidavit. This argument is
meritless, because personal knowledge of all the contents of a business record
affidavit is not required. See id; 4 STEPHEN A. SALTZBURG, MICHAEL M.
MARTIN & DANIEL J. CAPRA, FEDERAL RULES OF EVIDENCE
MANUAL 803.02[7][d] (Lexis-Nexis 8th. ed.2002). Consequently, the
district court did not abuse its discretion in admitting the affidavit as a business
record.

C.
30

The McPherson affidavit included, in its list of expenses, $132,239 related to

lost ship time. This entry reflects the cost of chartering the Joides Resolution
for the three days during which the hammer experiment was to have been
performed, but during which no research was done because of defendants'
failure to deliver the necessary equipment. The district court excluded that
portion of the affidavit, concluding that it was inadmissible as improper or
speculative lay opinion testimony.

31

"Under [FED.R. EVID.] 701, `a lay opinion must be based on personal

perception, must be one that a normal person would form from those
perceptions, and must be helpful to the [fact finder].'"10 "In particular, the
witness must have personalized knowledge of the facts underlying the opinion
and the opinion must have a rational connection to those facts." Id.
Accordingly, rule 701 does not preclude testimony by business owners or
officers on matters that relate to their business affairs.11 Indeed, an officer or
employee of a corporation may testify to industry practices and pricing without
qualifying as an expert. Tampa Bay Shipbuilding & Repair Co. v. Cedar
Shipping Co., 320 F.3d 1213, 1223 (11th Cir.2003). McPherson's testimony,
similarly, is based on particularized knowledge based on his position as vicepresident of the research foundation.12

32

In any event, the lost ship time charges set forth in the affidavit do not
constitute opinion testimony of any kind. As with the other documented
expenses, the amount established for lost ship time is an amount actually paid
by TAMRF. The figure was not derived from McPherson's opinion as to the
value of lost ship time, as the district court phrased it, but rather was established
according to precise contractual terms.

33

Because the ruling rested on a misinterpretation of rule 701, the exclusion of

the lost-ship-time portion of the affidavit was an abuse of discretion.13 But, "
[this court] will not reverse erroneous evidentiary rulings unless the aggrieved
party can demonstrate `substantial prejudice.'" Viazis v. Am. Ass'n of
Orthodontists, 314 F.3d 758, 767 (5th Cir.2002), cert. denied, ___ U.S. ___,
123 S.Ct. 2078, 155 L.Ed.2d 1063 (2003). As we explain, TAMRF is not
entitled to recover expenses related to the cessation of research activity aboard
the JOIDES RESOLUTION and thus was not prejudiced by the exclusion of
this evidence.

VI.

34

In its supplemental order on damages, the district court denied recovery for two
broad categories of expenses incurred by TAMRF: expenditures related to
TAMRF's own attempts to deliver part of the delayed shipment to the JOIDES
RESOLUTION;14 and costs incurred in reliance on defendants' commitment to
deliver the cargo by the appointed date.15 In its findings of fact, the district
court acknowledged that TAMRF had incurred these expenses but held them to
be unforeseeable and thus unrecoverable as consequential damages. TAMRF
argues that the expenses were reasonable and necessary to salvage critical
research.

35

We review de novo legal conclusions underlying an award of damages. Harken

Exploration Co. v. Sphere Drake Ins. PLC, 261 F.3d 466, 477 (5th Cir.2001).
In the absence of legal error, the award of damages is a finding of fact reviewed
for clear error. Tyler v. Union Oil Co., 304 F.3d 379, 401 (5th Cir.2002). So, "
[i]f the district court's factual findings are plausible in light of the evidence
presented, this court will not reverse its decision even if this court would have
reached a different conclusion."16

36

That TAMRF actually incurred the disputed expenses is uncontroverted; the

only issue is whether it is entitled to recover them as consequential, or
"special," damages, which are those unusual or indirect costs that, although
caused by the defendant's conduct in a literal sense, are beyond what one would
reasonably expect to be the ordinary consequences of a breach.17 As a general
rule, special damages are not recoverable in an action for breach of contract.
See id. Instead, to recover special damages, a plaintiff must establish that the
defendant "had notice of the special circumstances from which such damages
would flow."18 Accordingly, a carrier is liable for special damages caused by
an unreasonable and unnecessary delay in the transportation of goods only if it
has notice of the special circumstances leading to those damages.19

37

The question is therefore whether Magna had reason to know that untimely
delivery of the cargo would cause the special damages suffered by TAMRF.
The district court implicitly held that Magna lacked knowledge of the special
circumstances surrounding the shipment, concluding that neither the significant
costs TAMRF incurred in its attempts to secure an alternative means of delivery
nor those incurred in reliance on the agreed-on delivery date were
"foreseeable." The foreseeability of damages is a fact question we review for
clear error.20

38

Judging from the findings of facts, Magna had sufficient notice of the special
circumstances surrounding the cargo that it can be held liable for special

damages resulting from TAMRF's attempts to secure an alternate means of

delivering the cargo. The court found that "Magna was aware of the timesensitive nature of the delivery of [the] equipment." In addition, Dana
Holcomb, Magna's president, admitted knowing the purpose of the Ocean
Drilling Project.
39

Further, Magna had worked with TAMRF on several time- and place-sensitive
deliveries and was aware that, in this case, TAMRF had arranged alternate
shipping dates to ensure timely delivery. Although a general awareness that
harm could result from any untimely delivery does not justify an award of
consequential damages,21 Magna had actual notice of the importance to
TAMRF of timely delivery. Therefore, the district court clearly erred in holding
these expenses to be unforeseeable.

40

The special damages resulting from TAMRF's reliance on its contract with
Magna raise more difficult questions of foreseeability. The $7,465.60 TAMRF
spent outfitting the JOIDES RESOLUTION for the hammer experiment was
foreseeable, even given Magna's limited knowledge of the particulars of the
Ocean Drilling Project. Magna should reasonably have known that certain costs
would be incurred in preparing for research dependent upon the cargo and that
those expenditures would be wasted in the event Magna failed to deliver the
shipment in time.

41

With respect to the remainder of the expenses sought to be recovered, however,

the district court did not clearly err. Based on its superficial knowledge of the
purposes and methods of the research project, Magna could not reasonably have
expected that a failure to deliver TAMRF's cargo would render the JOIDES
RESOLUTION and its scientists incapable of performing any research for an
extended period of time. Thus, all the preparation costs associated specifically
with the task at hand are recoverable, but costs generally applicable to other,
unspecified research are not. Cf. Alpine, 23 F.3d at 948.

VII.
42

Maritime disputes generally are governed by the "American Rule," pursuant to

which each party bears its own costs. Galveston County Nav. Dist. v. Hopson
Towing Co., 92 F.3d 353, 356 (5th Cir.1996). Therefore, "absent statute or
enforceable contract, litigants must pay their own attorneys' fees." Id. TAMRF
contends, however, that it has identified a statute entitling it to feesTEX.
CIV. PRAC. & REM.CODE 38.001, which provides that a party seeking to
recover for breach of an oral or written contract "may recover reasonable
attorney's fees."

43

In MTO Maritime Transp. Overseas, Inc. v. McLendon Forwarding Co., 837

F.2d 215, 219-220 (5th Cir.1988), we rejected a similar challenge to the refusal
to award fees under the precursor to 38.001. Concluding that the statute was
discretionary and that there had been no abuse of discretion, the MTO Maritime
panel affirmed the denial of fees without deciding whether the state statute
controlled. Since MTO Maritime was decided, however, Texas courts have
concluded that "attorneys' fees under section 38.001 are mandatory."22
Therefore, we must address the question reserved in MTO Maritime, 837 F.2d
at 219, namely, "the applicability of state laws providing for attorney's fees in
an admiralty contract dispute." The applicability of state law to a maritime
contract dispute is a legal determination subject to de novo review.

44

Although the question is a matter of first impression in this circuit, two other
circuits have directly addressed it. Citing the "strong interest in maintaining
uniformity in maritime law," the Third Circuit has held that the various state
statutes providing for attorney fees should not be applied in federal maritime
disputes.23

45

Similarly, the First Circuit has held that state law is inapplicable to the question
of attorneys' fees in maritime contract disputes, noting that state law cannot
apply where it conflicts with maritime law and concluding that the fee statute at
issue contradicted the general rule of maritime law that "parties pay their own
fees absent bad faith or oppressive litigation tactics."24 We likewise conclude
that the general rule of maritime law that parties bear their own costs, coupled
with the need for uniformity in federal maritime law, precludes the application
of state attorneys' fee statutes, such as 38.001, to maritime contract disputes.

46

The judgment is REVERSED in part and AFFIRMED in part, and this matter is
REMANDED for further proceedings consistent with this opinion. In addition
to the initial award of $49,057.97, TAMRF is entitled to recover for amounts
expended in connection with its attempt to deliver the cargo, specifically,
$98,000.00 to airlift the cargo to Reunion Island and $38,962.90 to charter a
vessel for the attempted rendezvous with the JOIDES RESOLUTION. TAMRF
is also entitled to the $7,465.60 incurred in outfitting its vessel for research
dependent on the cargo. On remand, therefore, the district court shall enter
judgment of $193,486.47 for TAMRF against Magna and then shall determine
the extent to which Magna is entitled to indemnification from Italia and
Navaho.

Notes:

District Judge of the Eastern District of Louisiana, sitting by designation

The court heard testimony from a single witness, after which it informed the
parties that it would conduct the trial on written submissions. No party objected
to this procedure, and we make no comment on its propriety

The damages awarded included amounts spent to return various portions of the
cargo to Houston and travel expenses for Pat Thompson, a TAMRF employee
attempting to ensure proper delivery of the cargo

Navaho filed an answer but, without explanation, did not appear at trial

See, e.g., Royal Ins. Co. v. Southwest Marine, 194 F.3d 1009, 1018 (9th
Cir.1999) (holding that third-party complaint permitted original plaintiff to
recover from third-party defendants where complaint explained the third-party
defendants' direct liability to plaintiffs and repeatedly referred to rule 14(c));
Riverway Co. v. Trumbull River Servs., Inc., 674 F.2d 1146, 1154 (7th
Cir.1982) (where third-party complaint cited rule 14(c) and demanded that
third-party appear and answer the complaint).

TAMRF disputes the accuracy of this finding, contending that evidence of

damages was provided by Richard McPherson, the only live witness heard
from in the case. McPherson did testify as to damages, most or all of which
were denied even after the record was supplemented

SeeFord v. Elsbury, 32 F.3d 931, 937-38 (5th Cir.1994); Lavespere v. Niagara

Mach. & Tool Works, Inc., 910 F.2d 167, 173 (5th Cir.1990), abrogated on
other grounds by Little v. Liquid Air. Corp., 37 F.3d 1069 (5th Cir.1994) (en
banc).

Ford, 32 F.3d. at 938; see also Lavespere, 910 F.2d at 174 ("[T]o reopen a case
under Rule 59(e) on the basis of evidentiary materials that were not timely
submitted, the mover need not first show that her default was the result of
mistake, inadvertence, surprise, or excusable neglect....").

Presumably, Magna contends that TAMRF should have disclosed the

documents pursuant to rule 26(a)(1)(B) or (C), which requires a party to
disclose, respectively, documents relevant to disputed facts in the proceedings
or documents on which damages computations are based

This conclusion is particularly appropriate in light of the fact that most of the
statements in the affidavit relate to the payment of various expenses related to
the program over which payment McPherson had final approval authority

10

Miss. Chem. Corp. v. Dresser-Rand Co., 287 F.3d 359, 373 (5th Cir.2002)
(quoting United States v. Riddle, 103 F.3d 423, 428 (5th Cir.1997)).

11

Id. at 373-74 (allowing corporation's director of risk management to testify to

lost profits, and collecting cases from other circuits holding likewise); 3
STEPHEN A. SALTZBURG, MICHAEL M. MARTIN & DANIEL J.
CAPRA, FEDERAL RULES OF EVIDENCE MANUAL 701.03[7], at 70120 through 701-21 & Supp.2002 (Lexis-Nexis 8th ed.2002).

12

Although rule 701 was amended in 2000 to prohibit lay witnesses from offering
opinions based on "scientific, technical or other specialized knowledge within
the scope of Rule 702 [expert evidence]," the court inTampa Bay Shipbuilding,
320 F.3d at 1222-23, thoroughly reviewed the advisory committee notes
accompanying the 2000 amendment and concluded that the amendment did not
place any restrictions on the preamendment practice of allowing business
owners or officers to testify based on particularized knowledge derived from
their position.

13

See United States v. Buck, 324 F.3d 786, 791 (5th Cir.2003) (noting that district
court abuses discretion where decision to admit evidence is based on error of
law).

14

These expenditures include the $98,000 spent to airlift part of the cargo to
Reunion Island and $38,962.90 to charter a vessel for the attempted mid-sea
rendezvous with the JOIDES RESOLUTION

15

TAMRF's reliance costs include items such as the $7,465.60 spent to outfit the
JOIDES RESOLUTION for the scientific experiments that could not be
performed. TAMRF also spent $2,325 to feed and $24,796.16 to pay the crew
intended to perform those experiments. The most significant reliance
expenditure, however, was the roughly $140,000 spent to secure use of the
JOIDES RESOLUTION for the three days during which the hammer
experiment was to have been performed

16

Id. (citing Patterson v. P.H.P. Healthcare Corp., 90 F.3d 927, 936 (5th
Cir.1996)).

17

See Contempo Metal Furniture Co. v. E. Tex. Motor Freight Lines, Inc., 661
F.2d 761, 765 (9th Cir.1981) ("Special damages are those that the carrier did
not have reason to foresee as ordinary, natural consequences of a breach when
the contract was made.").

18

Id. (citing Ill. Cent. Gulf R. Co. v. S. Rock, Inc., 644 F.2d 1138, 1141 (5th Cir.
May 1981)); see also Gardner v. Mid-Continent Grain Co., 168 F.2d 819, 822

(8th Cir.1948) ("It is the general rule that damages recoverable for delay in
transportation must be such a[s] might reasonably have been contemplated by
the parties at the time the contract of carriage was made" (citation and internal
quotation marks omitted)).
19

See Alpine Ocean Seismic Survey, Inc. v. F.W. Myers & Co., 23 F.3d 946, 948
(5th Cir.1994) (holding carrier not liable for cost of replacing microorganisms
killed as a result of late delivery, in part because it had no knowledge of the
contents of containers and therefore could not have reasonably foreseen the
need to collect replacements from the ocean floor); see also Contempo, 661
F.2d at 765; Hector Martinez & Co. v. S. Pac. Transp. Co., 606 F.2d 106, 109
(5th Cir.1979); Ill. Cent. R.R. v. Horace Turner Corp., 9 F.2d 6, 7 (5th
Cir.1925).

20

Cf. Hector Martinez, 606 F.2d at 110; King v. Otasco, Inc., 861 F.2d 438, 444
(5th Cir.1988).

21

See Evra, 673 F.2d at 959 (holding that abstract knowledge that any untimely
bank transfer could theoretically cause great harm was not sufficient to justify
consequential damages).

22

Kona Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 603 (5th Cir.2000)
(citing Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997)).

23

Sosebee v. Rath, 893 F.2d 54, 56-57 (3d Cir.1990); id. at 57 ("[W]here a case
arises under the federal maritime law, as this case does, a local statute awarding
attorneys' fees should not be applied.").

24

See Southworth Mach. Co. v. F/V Corey Pride, 994 F.2d 37, 41 (1st Cir.1993);
id. at 42 (holding that state law governing awards of attorney's fees will not be
applied in a case involving a "standard contractual breach to which maritime
law has always applied").